In today's robust housing market, many prospective home buyers are seeking financing through government-backed loan programs - FHA or VA loans.
FHA loans are insured by the federal government.
They allow buyers to enter the housing market with a lower down payment than conventional lenders allow with more flexible underwriting guidelines than conventional lenders are able to provide.
VA loans are guaranteed by the Veterans Administration
For honorably discharged veterans and active military personnel in the U.S. armed forces (Reserves and National Guard also qualify). No down payment is required for a VA loan, and closing costs may be a gift. Like FHA loans, VA loans offer flexible underwriting guidelines.
Years ago, government-backed loans were regarded by home sellers as less favorable than conventional loans: longer processing, less qualified applicants, more paperwork and hassle were among the objections sellers voiced. Additionally, FHA/VA buyers were perceived as wanting more from sellers, asking for points and/or closing costs as part of the negotiations.
RE/MAX Allegiance recommends that sellers strongly consider the offers of all prospective buyers, bearing in mind that each one will involve negotiation for both parties. FHA and VA loans are now processed with the same speed and efficiencies as conventional loans, with paperwork and processes that are no more rigorous. While both FHA and VA loans do require a home inspection, most home buyers today are already likely to request a private inspection to protect their interests. And a higher sale price may well offset a seller's hesitation to pay some costs on the buyer's behalf.
We suggest that as sellers, you open your options to the broadest possible market of potential buyers, and consider each offer on its individual merits. Your RE/MAX Allegiance listing agent will offer sound advice throughout the selling process.